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Western Cape Business 2022

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Oil and gas A maritime

Oil and gas A maritime cluster will help to create focus in the energy sector. The Mossgas facility at Mossel Bay could be revived if feedstock in the form of gas is delivered from new discoveries. Credit: PASA The Western Cape Maritime Cluster has been established by private companies and is supported by the government of the Netherlands and the Western Cape Department of Economic Development and Tourism. The group is planning to strengthen the industry by focussing on an integrated approach. Regional steering committees for Saldanha Bay on the west coast and Mossel Bay on the east coast have been set up. There are nine focus areas for the cluster, including energy (offshore), logistics and shipping, marine services and metal and machine-working (shipbuilding, marine equipment). The Saldanha Bay Industrial Development Zone Licensing Company (SBIDZ-LC) has announced the start of phase one of the development of the main infrastructure of the IDZ. Located within the southern hemisphere’s deepest and biggest natural port, the company will spend R3.5-billion on developing 356ha of space to enable the port to offer a wider variety of services. A floating dock, ship-lift facilities and marine service jetties will be among the new services created. Ultimately, the seven-part development plan will see the SBIDZ become a South African Freeport, a Special Economic Zone and customs-controlled area within a port, dedicated to the oil, gas and marine sector. The three main exploration and production customer groups being targeted are: Drilling companies: Office space, warehousing, logistical facilities and support services. Petroleum companies: Office and warehousing space for an operational base close to active fields. Oilfield service companies: 24-hour operational nodes along the coast, in the form of office spaces and warehousing bases. In sites such as Offshore Supply Bases [OSSBs] and/or quaysides for supply and re-fuelling purpose. SECTOR INSIGHT R3.5-billion is to be spent on the first phase of the Saldanha Bay Industrial Development Zone. The SBIDZ-LC has established the Saldanha Bay Innovation Campus which aims to promote collaboration between academic institutions, industry, government and the local community specific to marine and energy research, development and innovation. It also intends supporting entrepreneurs and new ventures through incubation and acceleration programmes. In 2019 Total and its partners created a stir with the announcement that gas condensate had been found at a site called Brulpadda off the coast of Mossel Bay. In 2020, the nearby Luiperd prospect in Block 11B/12B delivered more exciting news. The block, in the Outeniqua Basin 175km off the southern coast, covers an area of about 19 000km². The exploration WESTERN CAPE BUSINESS 2022 26

OVERVIEW was done by the semi-submersible rig Deepsea Stavanger, which journeyed twice from Norway to lead the exploration projects. The two finds raise the odds of Total investing in what it calls a “world-class” offshore gas site. The drilling campaign employed 195 South Africans with specialist skills but the potential spinoff is enormous for the Western Cape and South Africa, if the find leads to drilling and commercialisation. If Total goes ahead, the PetroSA GTL refinery at Mossel Bay (Mossgas) could be revived and the idea of creating a gas market in South Africa would get a massive boost. Commissioned in 1992 as the world’s first gas-to-liquids (GTL) refinery, Mossgas was due to close in 2020, because, as President Ramaphosa announced, it had practically run out of feedstock. PetroSA is South Africa’s national oil company. Petroleum Agency SA (PASA), which encourages exploration and regulates the oil and gas industry, has noted the significance of international oil companies committing to exploration off South Africa’s coast. Increased confidence by such companies can only lead to growth in the industry, and with the massive gas finds in the Rovuma Basin off Mozambique in 2020, there are sure to be more companies interested in South Africa’s potential. In addition to adjudicating on coastal fields, the agency has awarded coalbedmethane-gas exploration rights in KwaZulu-Natal and natural gas exploration permits in the Free State. Natural gas lies also lies offshore to the west of South Africa in the Atlantic Ocean (Ibhubesi). Block 2A of the Ibhubesi gas field northwest of Saldanha is estimated to have reserves of 850-billion cubic feet of gas. The Western Cape’s status as an oil and gas hub has been enhanced with the opening of an open-access liquefied petroleum gas (LPG) import and storage terminal at Saldanha Bay. Oil Cape Town’s oil refinery changed hands in 2018 when Off The Shelf Investments (OTS) completed a 3-million purchase of Chevron’s downstream assets in South Africa. Chevron has been rebranded as Astron, but the Caltex service-station brand has been retained. OTS is the Black Economic Empowerment (BEE) partner of mining giant Glencore, who financed the deal. ONLINE RESOURCES Petroleum Agency South Africa: Saldanha Bay Industrial Development Zone: South African Oil and Gas Alliance: Western Cape Maritime Cluster: The refinery in Milnerton produces petrol, diesel, jet fuel and liquefied gas for the Western Cape and for export to other African countries. The Western Cape spends R76- billion annually on crude oil imports and exports refined petroleum to the value of R13.2-billion. Large quantities of oil are transported around the Cape of Good Hope every year: 32.2% of West Africa’s oil and 23.7% of oil emanating from the Middle East. Problems in the container ship market have caused some stress in the local sector but the long-term prospects for shipping and oil and gas are still strong enough for national government to pursue Operation Phakisa (which includes a strong maritime economy push) and for Transnet National Ports Authority to spend heavily on upgrading the nation’s ports. The Bergun terminal, comprising 12 tanks located on the Eastern Mole of the Port of Cape Town, has added to the port’s fuel storage capacity and is connected by pipeline to the Astron refinery. The Council for Geoscience (CGS) is doing an intensive study of South Africa’s potential shale gas resources in the Karoo area around Beaufort West and the report is expected to be released in 2022. The major economic sectors using gas are the metals sector and the chemical, pulp and paper sector. Brick and glass manufacturers are also big consumers. ■ 27 WESTERN CAPE BUSINESS 2022

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